The development of bauxite downstream industry is far promising as out of the eight smelters in the government’s pipeline, only one has shown significant progress, a senior government official says.
” The minister [of Energy and MIneral Resources] has ordered direct field supervision for eight smelters project. Of these eight, seven smelters projects show no progress. In our term, they are still green field, while one smelter is about to finish,” Expert staff to the Minister of Energy and Mineral Resources (ESDM), Irwandy Arif, said on Friday, June 21, 2024.
The one that shows progress is a smelter of PT Borneo Alumina Indonesia, a project by state owned mining company PT Aneka Tambang in Mempawah regency, West Kalimantan.
According to Irwandy, the government gave permission for the eight bauxite mining companies to export their raw bauxite ores until they have enough money to build smelters. However, in 2023, the government saw no progress was made in the seven projects and then decided to ban the export of bauxite ores.
“One of the reasons is they have no sufficient fund to build smelters,” he said.
The government, he added, has helped facilitate the seven smelter projects to seek for investors and partners by organizing investors forum for the bauxit mining companies.
However, from those event, only one smelter project secured the funding from investors and partners.
“Actually, as long as the project is feasible with projected strong demands, banks and investors will be interested”,” he said.
While the other companies reasoned that they have their own partners and fund-raising scheme.
Besides funding, the other key factor is power. Power for smelter is quite expensive that the companies should cooperate with the State electricity company PT PLN.
